DrumBeat: June 5, 2009

Mid-term oil production outlook down by 500,000 barrels a day

Over the next 11 years, Canada's oil industry is likely to produce 500,000 barrels a day less than was forecast a year ago, the Canadian Association of Petroleum Producers (CAPP) said Friday.

The forecast for the oilsands has dropped even further, the industry group said in an annual report on expected future production.

PDVSA set to hire workers

Venezuela state-owned PDVSA will hire all 8000 workers from the more than 70 oil service contractors that the government nationalised last month, President Hugo Chavez said.

A Green-Powered Trip Through Ecotopia

This free-ranging conversation between Ernest Callenbach, author of the legendary Ecotopia (1974), and Harvey Wasserman, author of SOLARTOPIA! Our Green-Powered Earth, A.D. 2030 (2007), about our green-powered future was filmed by EON and can be viewed here.

Why This Crisis May Be Our Best Chance to Build a New Economy

Wall Street is bankrupt. Instead of trying to save it, we can build a new economy that puts money and business in the service of people and the planet—not the other way around.

The Failed Promise of Innovation in the U.S.

"We live in an era of rapid innovation." I'm sure you've heard that phrase, or some variant, over and over again. The evidence appears to be all around us: Google (GOOG), Facebook, Twitter, smartphones, flat-screen televisions, the Internet itself.

But what if the conventional wisdom is wrong? What if outside of a few high-profile areas, the past decade has seen far too few commercial innovations that can transform lives and move the economy forward? What if, rather than being an era of rapid innovation, this has been an era of innovation interrupted? And if that's true, is there any reason to expect the next decade to be any better?

Russia warns on output from high loan rates

Russia warned today oil could soar to $150 a barrel if the global economic crisis continued to curb investment in capacity by top producers.

Moscow's top energy policy official also warned output from Russia could be hit unless borrowing costs fell for its energy giants and called for a move away from trading oil only in US dollars.

Russia, which is currently producing more oil than Saudi Arabia, has refused to cut production with Opec and wants higher prices for the lifeblood of its $1.7 trillion economy.

Oil industry seeks to adjust to changing landscape

SINGAPORE (Reuters) - Oil's race towards $70 a barrel in the last few months has stirred a debate on whether prices have run ahead of fundamentals, or if the market has bottomed and the time is now for a comeback in investments.

Near-term overcapacity, relatively lower oil prices and caution in committing to new large-scale refining and upstream projects have also prompted concerns of under-investment that will lead to future oil price spikes.

"The key issue facing the industry is trying to understand future demand and trying to balance that against investments," Simon Littlewood, president of consultancy Asia Now, said.

High oil prices may mean more jobs

“The market will tell people, ‘See that big honkin’ SUV? Ditch it. See that bike? Buy it,’ ” he says in a boardroom near Toronto’s financial district. “No one will have to tell them. They’ll figure it out all by themselves, and I think that world is just around the corner.”

Rubin’s recently published book explains that as the supply of easily accessible oil depletes, the price of oil will continue to rise to the point where high transportation costs will make it too expensive to import manufactured goods from overseas – or even from another province – forcing cities to start producing goods locally.

Related: Rubin's book is #1 on the nonfiction bestsellers list in Canada.

Panarchy: Insights Into Our Civilization

As valuable as Dr. Buzz Holling's notion of panarchy theory is in helping us understand the cyclical changes in forests -- the way they move through continuous phases of regeneration, growth, increasing connectivity, and then rigidity, crisis, collapse and regeneration again -- his thinking is much more valuable in helping us identify and correct the same trends occurring in our modern civilization. It, too, is a natural system that has been moving through a growth phase for the last several centuries and is now becoming increasingly interconnected and rigid, conditions that are prelude to a crisis.

Oil touches $70 after jobs report

LONDON (Reuters) -- Oil rose Friday, hovering around $70 a barrel, after a better-than-expected report on the U.S. labor market.

Government data showed the U.S. economy shed 345,000 jobs in May, below the 520,000 expected by economists and the revised 504,000 jobs lost in April. The jobless rate rose to 9.4%.

Bullish Goldman Sachs Predicts Price Hike in 2009, 2010 Forecast

Bullish analysts at Goldman Sachs have raised their oil price forecast for 2009 and 2010, on confidence that a new and sustained upturn is underway.

The global investment bank and securities firm said on Friday that it has raised its 2009 forecast to a $59 a barrel average, up from an earlier prediction $50. For 2010 the broker lifted its forecast to $80 a barrel, up from $70 a barrel as previously predicted.

'Tax breaks still on agenda'

Russia will return to the idea of granting new tax breaks to oil firms as soon as the acute phase of the financial crisis is over, Russia's President Dmitry Medvedev said today.

Ukraine President Pledges Loan to Avert New Russian Gas Crisis

(Bloomberg) -- Ukraine President Viktor Yushchenko, trying to avert a repeat of the dispute that froze gas shipments to Europe earlier this year, said the state energy company will receive the funds it needs today to pay for Russia imports.

Waiting for the Blow: GOM Rig Fleet Preps for Hurricane Season

Hurricane season 2009 officially begins this week and lasts through Nov. 30. Despite the fact that two respected hurricane forecasting groups have predicted an average season, the high winds and waves from one hurricane could wreak havoc on the offshore oil and gas industry operating in the Gulf of Mexico.

Shale Drillers Push Back Against Calls for More Oversight

The oil and gas industry's trade group says increased federal regulation of a method to crack underground shale rock to release natural gas could increase costs and chill production.

"Drilling operations today are being effectively regulated by the different states," said Richard Ranger, a senior policy adviser for the American Petroleum Institute.

Rio Tinto scraps Chinalco deal

MELBOURNE (Reuters) -- Miner Rio Tinto scrapped a planned $19.5 billion tie-up with China's Chinalco struck at the height of a global financial crisis, turning instead to an iron ore joint venture with rival BHP Billiton and a share sale to slash its debts.

The collapse of the Chinalco deal, put together in February in a bid to halve Rio's $38 billion of debt, leaves the world's biggest steel making nation vulnerable to just two suppliers -- a Rio/BHP combination and Brazil's Vale -- controlling 70% of global iron ore trade.

Africa: Biofuels And Neo-Colonialism

We are currently witnessing a new and massive land-grabbing scramble in Africa, unprecedented since the fall of colonialism. The 'justification' for this land-grabbing is supposedly that global climate change is threatening the entire world and that therefore huge tracts of land are required for the planting of biological crops which produce 'biofuels' which should replace 'fossil fuels' so as not to add net carbon dioxide to the atmosphere.

But this ignores the underlying fact that the vast majority of carbon dioxide is being produced by rich countries in the North who do not want to reduce their excessive fuel consumption and wastage levels. It is postulated by the proponents of 'biofuels' that enormous areas of unused (or under-used) land supposedly exist in Africa, which can be bought (cheaply) by commercial enterprises from the rich countries in the North. The logic is that rich countries can thus 'buy' their way out of a situation wherein they would otherwise have to drastically reduce their carbon dioxide production if indeed they really are serious about the threats posed by such emissions.

UAE to award nuclear project contract in H2'09-Total

The UAE will likely award a contract for the construction of two nuclear reactors in the second half of 2009, a senior executive at French oil major Total said on Thursday.

Oil Stored On Tankers Is Up 71% Since April

The volume of refined fuel stored on ships floating at sea has jumped nearly 71 percent since early April, industry sources said on Thursday.

About 41 million barrels of gas oil and jet fuel were being stored in tankers mostly off Europe's coast, up from around 24 million barrels in April, sources said.

Crude has rallied to a seventh-month high on optimism the economy would soon improve, despite the continued build in storage.

Crude Oil Floating Storage Falls As Crude Rallies

LONDON -(Dow Jones)- The number of supertankers used to store crude oil worldwide dropped last month after a rally in crude oil prices lured barrels onshore, shipping data suggested Thursday.

A total of 34 very large crude carriers were in use for storage purposes at the end of May, down from 53 a month earlier, according to preliminary data from shipbroker Simpson Spence & Young Ltd.

The number of very large crude carriers - which typically hold about 2 million barrels of crude each - employed in U.S. Gulf of Mexico crude oil storage dropped to 16 from 24 over that period, said analysts at SSY, the world's largest independent shipbroking group.

Oil Drops as U.S. Unemployment Expected to Rise to 25-Year High

(Bloomberg) -- Crude oil dropped before a report today forecast to show that unemployment rose to a 25-year high in the U.S., sowing doubts about the global recovery.

The International Energy Agency’s executive director, Nobuo Tanaka, said today that oil demand may not return quickly even after economic activity picks up. Yesterday, crude rose to a seven-month high as Goldman Sachs Group Inc. increased its year- end forecast to $85 a barrel from $65.

Crude Oil May Fall as U.S. Fuel Demand Declines, Survey Shows

(Bloomberg) -- Crude oil futures may fall from a seven-month high on speculation U.S. stockpiles will increase as consumption tumbles.

Twenty-three of 34 analysts surveyed by Bloomberg News, or 68 percent, said futures will fall through June 12. It’s the most bearish response since February 2008. Seven respondents, or 21 percent, forecast that oil prices will rise and four said the market will be little changed. Last week, 50 percent of analysts said prices would decline.

Shell's Van der Veer sees global oil demand now stabilized

St Petersburg, Russia (Platts) - Shell's outgoing CEO Jeroen van der Veer said Friday he believes that global oil demand has now stabilized, but warned that industry costs must fall further in order for Shell to revive its delayed oil sands projects in Canada.

"So far we saw a decline in demand in Europe and the US, especially in the fourth quarter of 2008," he said in an interview Friday.

BlackRock’s Rice Says Oil Shares May Double as Crude Climbs

(Bloomberg) -- Daniel Rice, whose BlackRock Energy & Resources Fund rose more than any U.S. equity mutual fund in the past decade, said oil-company stocks may double within three years as crude prices climb toward $90 a barrel.

The global recession didn’t fundamentally change the demand for energy or affect long-term supply constraints, Rice said in a June 2 interview at his Boston office. Coal stocks may triple, he said.

Byron King: Heavy Oil Starts Looking a Lot More Enticing

But now conventional oil resources are drying up. The reasons have to do with geology, politics, macroeconomics and the investment cycle. Boiled down, it’s the Peak Oil argument, which focuses on the worldwide decline in output of light, easy-to-get oil. And Peak Oil is a serious matter. As light oil gets scarce, however, a lot of new heavy oil plays are coming out of the industrial shadows.

Indeed, with the breakout of heavy oil into the marketplace, the world energy business is about to change dramatically.

Sell the Banks, Buy Oil Stocks

I’d also point out that natural gas in particular sure looks cheap. Over the weekend, I was reading over some recent research from Matt Simmons, the famed energy analyst. He points out how we are running out of the sweet, dry gas and how more and more supply comes from unconventional sources. These sources have huge decline rates. As he puts it: “Deep-water gas declines fast. Conventional declines fast. Tight rocks [or shale gas] decline super fast.”

People focus a lot on the sluggish demand, but the drop-off in supply is going to be a bigger issue. The industry has to run pretty hard to keep the gas flowing. He also produces a number of charts that show how drilling-intensive these basins are. These production declines occur even in the face of increased drilling of wells.

Russia says $75 per barrel reasonable price for oil

ST. PETERSBURG (RIA Novosti) - A reasonable price for oil is at least $75 per barrel, Russia's first deputy prime minister said on Friday adding that production could drop in Russia if the credit crisis persists.

Speaking on the sidelines of the International Economic Forum in St. Petersburg, Igor Sechin said: "We need at least $75 per barrel."

Russia launches second train of Sakhalin 2 LNG plant

St Petersburg (Platts) - The 9.6 million mt/year Sakhalin 2 project in Russia's Far East has begun commissioning the second train at its LNG plant, an official with Gazprom told Platts Friday.

"Yes, we have launched the second train," Gazprom's head of foreign operations, Stanislav Tsygankov, said in St. Petersburg.

Gas Supplies to Bulgaria to be Cut on Sunday, Russian Ambassador Warns

Russia might cut the gas supplies for South-Eastern Europe, Bulgaria included, if Ukraine fails to pay its debts to Gazprom, the Russian ambassador to Bulgaria Yuri Isakov warned on Friday.

Isakov sent a notice to Bulgarian Energy Minister Petar Dimitrov, saying that Sunday, June 7th, is the deadline for Ukraine. This is the same day Bulgarians vote for members of the European Parliament.

Kremlin Woos Foreign Investors as Putin Slams Corporate ‘Greed’

(Bloomberg) -- The Kremlin touted the resilience of the economy at yesterday’s opening of the “Russian Davos” in St. Petersburg. BP Plc, Citigroup Inc. and Royal Dutch Shell executives and 2,000 guests heard little of nearby protests against what Premier Vladimir Putin called corporate greed.

Baker Hughes Announces May 2009 Rig Counts

HOUSTON /PRNewswire-FirstCall/ -- Baker Hughes Incorporated announced today that the international rig count for May 2009 was 993, up 7 from the 986 counted in April 2009, and down 82 from the 1,075 counted in May 2008. The international offshore rig count for May 2009 was 272, down 1 from the 273 counted in April 2009 and down 33 from the 305 counted in May 2008.

Nigeria: Fuel Scarcity Imminent

Nigeria may face another round of fuel scarcity if the marketers' subsidy claims are not paid on time, Independent Petroleum Marketers Association of Nigeria (IPMAN) has warned.

IPMAN said the Nigeria National Petroleum Corporation (NNPC) is yet to pay the Petroleum Equalisation Fund (PEF) their claims.

Current Market Strategy? Invest in Resource-Rich Countries

The US Treasury, Federal Reserve and Congress are attempting to re-inflate the US economy by working in concert to pump massive amounts of US dollar liquidity into the system. Although their policies have been successful in averting a complete financial meltdown, and stability has returned to US equity markets, the questions still remain: can US policymakers solve a commodity problem (oil) with financial policies? Can the US ever again attain financial solvency and economic security without first solving their addiction to foreign oil by adopting a strategic long-term comprehensive energy policy? If you’re an American investor and believe the answers to these questions are “No”, how should you position your investment portfolio to protect your assets and prosper in a future when America’s star is likely to dim?

Mitsubishi Motors to Preempt Rivals’ Electric Cars

(Bloomberg) -- Mitsubishi Motors Corp., the maker of the i MiEV electric car, will begin selling the model to corporate and government customers in Japan next month before Toyota Motor Corp. and Nissan Motor Co. introduce rival versions.

World oil supply has peaked: expert

Professor Aleklatt says all governments must act now to reduce the world's energy consumption.

"If we don't have the energy, society will crack, so there is not one solution," he said.

Walking Around the World: Innovation and inspiration for Designing, Engineering and Planning our Cities

The obesity epidemic, congestion, pollution, peak oil and climate change are just five of the imperatives that demand we walk more — and walk more often. Yet the barriers to walking have intensified in recent years. This presentation will show how streets around the world are being opened up again to people on foot, with spectacular benefits for our personal health, and the health of our cities, our communities and our children. Walk 21 is a global partnership of experts who raise international awareness of walking issues and support development of best practice.

Attend a free lecture on this subject by Dr. Rodney Tolley with Bronwen Thornton of Walk 21on Monday, June 8th at 7:00pm at UBC Robson Square, located at 800 Robson Street in Vancouver. Reservations are required, so please call 778.782.5100 or e-mail cstudies@sfu.ca.

On American sustainability: anatomy of societal collapse

“The extent to which we are overextended is appalling. Under the best case scenario, the US can support sustainably less than 20% of our existing population living at less than 20% of our current average living standard,” Clugston said.

High Population Density Triggers Cultural Explosions

ScienceDaily — Increasing population density, rather than boosts in human brain power, appears to have catalysed the emergence of modern human behaviour, according to a new study by UCL (University College London) scientists published in the journal Science.

High population density leads to greater exchange of ideas and skills and prevents the loss of new innovations. It is this skill maintenance, combined with a greater probability of useful innovations, that led to modern human behaviour appearing at different times in different parts of the world.

Gas companies threaten city water supply — NYH20

Water, water everywhere, but not a drop to drink.

That’s the doomsday scenario being presented by an environmental group that wants the city to ban a certain type of drilling process to acquire natural gas, buried near the city’s supply of drinking water.

China Rejects $21.5 Billion of Polluting Projects

(Bloomberg) -- China, the world’s second-biggest energy user, rejected 147 billion yuan ($21.5 billion) of project proposals in the past seven months because of concern they will worsen pollution.

As many as 29 steel, petrochemicals and power projects weren’t approved between November last year and May, Zhang Lijun, the deputy head of the Ministry of Environmental Protection, said in a televised press conference today in Beijing. The country’s emissions of sulfur dioxide fell by 4.9 percent in the first quarter from a year earlier, he said.

China considering environmental tax

The Chinese Government says it is considering taxing polluting businesses in a bid to improve the environment in the nation, one of the world's largest emitters of greenhouse gases.

"Collecting environmental taxes from [polluting] companies is one of the directions of China's tax system reform," Zhang Lijun, deputy head of the Environmental Protection Ministry, said.

Carbon capture no 'silver bullet'

The much-touted carbon capture and storage technology is not the answer to reducing greenhouse gas emissions from oil sands projects in northeastern Alberta, Environment Minister Jim Prentice says.

While Ottawa and Alberta are spending billions of dollars on CCS demonstration projects, the minister yesterday acknowledged what critics have said all along: The technology has limited application at the energy-intensive mines and in situ projects that extract the bitumen from the ground.

Nurturing Forests, Peatlands Will Attack Global Warming - UNEP

PARIS (AFP)--Fixing deforestation, preserving peatlands and ending reckless agricultural methods could be a major weapon in tackling climate change, the U.N. Environment Programme said Friday.

Biological systems, if responsibly managed, can absorb billions of tons of the dangerous carbon gases that fuel the greenhouse effect, the agency said in a report coinciding with World Environment Day.

Forest carbon market already shows cracks

LONDON/NUSA DUA, Indonesia (Reuters) - It could save the rainforests of Borneo, slow climate change and the international community backs it. But a plan to pay tropical countries not to chop down trees risks being discredited by

Maldives’ Disappearing Coast Prompts Appeal to UN Space Agency

(Bloomberg) -- The Maldives, one of the nations most threatened by global warming, is appealing to the United Nations space agency to help the island country plan its defenses against rising sea levels.

“Beach erosion is the No. 1 problem for our country right now,” Environment Minister Abdulla Shahid said today in an interview in Vienna. The Indian Ocean nation of 385,000 people has had to relocate the populations of two of its 200 islands because of eroding beaches, he said.

Captured on camera: 50 years of climate change in the Himalayas

When Fritz Müller and Erwin Schneider battled ice storms, altitude sickness and snow blindness in the 1950s to map, measure and photograph the Imja glacier in the Himalayas, they could never have foreseen that the gigantic tongue of millennia-old glacial ice would be reduced to a lake within 50 years.

But half a century later, American mountain geographer Alton Byers returned to the precise locations of the original pictures and replicated 40 panoramas taken by explorers Müller and Schneider. Placed together, the juxtaposed images are not only visually stunning but also of significant scientific value.

Study: Climate change altering lake levels

WEST MICHIGAN -- A new study blames a post-1998 plunge in upper Great Lakes water levels on changing climate patterns -- not a manmade "drain hole" sucking lake water out the St. Clair River.

So there's no need to plug the leak ... for now. But global warming might make a St. Clair fix necessary in the future.

Climate change work 'a game-changer': Pelosi

WASHINGTON (AFP) – US House Speaker Nancy Pelosi said Thursday that the initial progress Congress has made on a climate change bill was a "game-changer" in her recent talks in China ahead of a major UN conference.

"Frankly, it was a game-changer for us in our discussions in China, that the US was ready to do something very substantial, and that, therefore, it was important for China to do so, as well," Pelosi told reporters.

Global Airline Industry Group Starts Carbon-Offset Program

(Bloomberg) -- The International Air Transport Association began a carbon-offset program so airlines can help passengers compensate for carbon-dioxide emissions by making financial contributions to environmental projects in developing countries.

The Business Case for Climate Protection

Hunter Lovins, co-author of the acclaimed book Natural Capitalism: Creating the Next Industrial Revolution and president and founder of Natural Capitalism Solutions, makes the economic case for moving aggressively to solve such challenges as global warming, peak oil, the vulnerability of our energy infrastructure and others.
The presentation is here [PDF]. Hunter Lovins is Amory's ex-wife.

Good economic news: PUR drops dramatically

My Personal Unemployment Rate (PUR) went from 100% to 0% this week, as I found a job. I'm taking about a 40% pay cut, but paychecks and benefits are back.

Congrats. Hope your new job fits in with ELP.

That's cool. I think we chatted a few months back about free Cobra.

Today is the start of my 6th month unemployment with few prospects. I did finish the Worlds Toughest Half Ironman last weekend and I have Escape from Alcatraz coming up next weekend. At least the time off allows a 45 year old to get into the best shape of his life

The only bills I have are house and motorhome. The motorhome is getting more use this year due to low diesel prices and high time off.

I mentioned to Leanan yesterday that the unemployment numbers were going to get skewed in the coming months as the number still includes increasing government jobs and isn't taking into account new entries into the workforce. And furloughed employees are still considered employed. The household survey is what really matters. This snippet from Marketwatch says it all:

Unemployment rose by 787,000 in the month to 14.5 million, pushing the jobless rate from 8.9% to 9.4% -- the highest level since August 1983. The jobless rate has increased five percentage points from its low in the biggest increase since the Great Depression.


An alternative gauge of unemployment -- which includes discouraged workers and those whose jobs been cut back to part-time status -- rose to a record 16.4% from 15.8%. The records go back to 1994. The number of workers forced into part-time positions rose by 164,000 to 9.1 million.

Still looks bad to me however you slice it. I hope you don't go out and buy a new car to "celebrate" your new job.

Payroll jobs lost in the month declined to 345,000 jobs; the lowest number of existing job losses in months. Graduates looking for jobs and people trying to come out of retirement were among those who increased the unemployment figures. Farm employment should increase through the summer peaking about Aug-Oct with the harvests. There was a TV news story about a crab processing plant on the Maryland eastern shore of the Chesapeake Bay that could not find enough workers to pick crab meat out of crabs. Other crab meat processing plants were unable to open due to not enough crab pickers. This was about two months ago. The seasonal workers typically earned about $7.00-$10.00/hr depending on their speed.

My PUR is at risk of going from 0% --> 100% in the next 2-3 weeks.

DuPont is D&Ring several lines and cutting about 35% of the exempts at my site...we just don't know who the casualties will be yet...

I wonder if the many millions of $$$ I have saved or made them in the past few years will matter???

On the bright side, careerbuilder.com shows 3 job opportunities in the Columbus, OH area with similar pay...

The smart money is on trying to jump to one of the open positions before the hammer drops.

It's always harder to find a new position after you've lost the old one.

From the Flowing Storage stories above:

....Refined product* in floating storage: +24mil barrels
....Crude oil in floating storage: -38mil barrels

Net change of oil in floating storage: -14mil barrels

So oil inventories in floating storage are falling.

*most of this product is distillate (heating oil, diesel, jet) and not gasoline.

Latest unemployment statistics from Canada, for May 2009, are:
Ontario (where the auto factories are concentrated) = 9.4%
Alberta = 6.6%
Calgary = 6.6%

Calgary 7-Eleven Help Wanted signs index = near zero.

Alberta's hit is mostly on the oilsands side. Conventional oil is getting by for junior petes who have no debt. I recently bought into a startup specializing in buying producing wells from juniors who got silly with their line of credit a couple of years ago and now have to dump assets to meet the payments. As in every recession or depression, those who suffer most are the ones with debt.

Gold prices are steady in Canadian dollars ($1,100) because the loonie is increasing at the same rate as the gold price. I've been buying two or three Maple Leaf coins per week out of my cash flow and some weeks the cost has actually been lower. This is a long-term buy-and-hold for twenty years from now as part of my old-age pension.

Make sure to check the pic with this article: "Nigeria's rulers are probably nostalgic about the days when Ken Saro-Wiwa was their biggest problem. "

Possibly linked before: "Trial against Shell is postponed again"

In other Nigeria news, WHO is giving 4% (or 184,000 doses) of their antiviral stockpile to Nigeria (LINK) for swine flu infections. Publicly, officials remarked that this country is deserving because they play nicely with the WHO, they don't have any capabilities to make their own vaccines, and the deadly H5N1 strain has been tracked there. With no confirmed cases of swine flu in Africa, this is a proactive move by an organization that is anything but publicly proactive. I would think that oilfield service workers would be top priority when the flu starts spreading.

I can only assume there were a lot of automated 'sell at $70' orders on the market today. WTI jumped more than a dollar to $7.23 in five minutes when better than expected job figures came out. Then it fell $2.50 to $67.60 in the next two hours.

Will we close above 70?

Latest news on the Air France downed aircraft is that the debris sighted has been confirmed as just ocean trash and not debris from the aircraft.

Interesting that trash has grown in the ocean to this degree.

To Porge: The Tacan you mentioned the other day back then in my time only had a usable range of about 120 nautical. It was the ARN-21. I went to school on it.

The commercial Av name is DME for Distance Measuring Equipment.

We flew thousands of miles and only coming close to our return point would the Tacan come to life. Always a cheer from the flight deck then but most pilots basically ignored it and wouldn't trust it anyway. The radar paint from our CIC always showed a believable picture.

I don't believe the crash site will ever be found and I don't think any terrorists will claim it ,or ones that can be believed anyway.

Again I don't understand flying into the teeth of very, very bad weather, as this weather was described.


In the article "High oil prices may mean more jobs" linked in the Drumbeat, the reporter summarizes one of Rubin's predictions as:

...high transportation costs will make it too expensive to import manufactured goods from overseas – or even from another province – forcing cities to start producing goods locally.

While I am all for localized manufacturing, getting there may prove to be a long hard project.

As an example, I recently started a business to manufacture a clothes drying rack with the original goal of keeping it as localized as possible. Though it is a new type of rack, I did design it to have simple rugged components. Basically wood and steel and a few fasteners...

Then I started trying to source the components here in Missouri. It wasn't possible. So I had to alter my search to "Made in the USA". To find quality wood dowel manufacturers and short-run steel stampers and fastener makers I had to get the parts from states spread out in a big rectangle from Iowa to Wisconsin to Maine to Tennessee. I couldn't even get all US fasteners, and had to settle for a few from Taiwan.

I think that when it comes to manufacturing more locally we need to think of it in stages:
First Stage: Continental - such as North America (Canada,US,Mexico) producing the vast majority of the items purchased in North America. Even this is amazing complex - just think about electronics and minerals and clothing.
Second Stage: Country or Region - this will be a magnitude tougher. I included region because some countries like Sweden may need to band with their neighboring small countries. The decrease in frivolous consumerism needed just to reach this second stage is earth-shaking.
Third Stage: State or Province - even as a trained Manufacturing Engineer who always strived to make product designs and manufacturing methods as simple as possible, I can not visualize this stage. Once we get here it is a whole different culture, one that may not even be familiar to our great-grandparents who did at least have access to goods from many other states and countries, even if they were available only occasionally when the travelling Peddler came to town...

Whilst you've got good points, the importance is presumably to deal first with goods that are high volume (since with, eg, once every ten years purchases like electronics, lawnmowers, etc, will be dwarfed by things like throwaway products, cleaning products, clothing, etc). The presence of things like imported Roman amphora in ancient Britain indicates that not having fossil fuels means that you can't have things imported, but that they're very high price things (which tends to restrict them to the relatively rich). What you can't get is high volume cheap goods.

Securing a steady supply of toilet paper is right after food on my list :)

Being in Maine with no shortage in papermaking materials.. I still would contend that a TP substitute isn't hard to come up with.. it's just highly unpalatable to most.

I'm just a couple years past washing a bunch of cloth diapers, and realize that a little poopy-cloth cleaning isn't going to kill us. And that would be a MAJOR reduction in material consumption, if we could set a bathroom up for that choice, and maybe go back to Hankies instead of Tissues, as well.


dietary changes can also make TP less necessary. when I'm 'firing on all fours' and eating lots of fiber and unprocessed foods, I can get by with like 1 square of TP.

Use water -- it's cleaner and less waste. Unless the pump will not work b/c the coming energy crisis.

Yeah, I have a bidet attached to my toilet. No TP needed and much more hygienic.

Dinh that was a joke I used to live in Vietnam so I have intimate knowledge of alternative toilet techniques. And of course the traditional outhouse in America.

One time hiking at the bottom of the Grand Canyon I found the perfect fallen tree to look over the canyon and take care of business so I started digging a hole and hit someone elses choice at exactly the same spot :)

I found it very funny.

LOL, Memmel. That is a terrific story!

True story I'm not shitting you :)

Based on my work experience in distribution, I believe economic activity will be based on costs. As a rule-of-thumb, water is always cheaper than rail, rail is always cheaper than truck. These cost structures don't overlap. I have often seen on shipments from china, that the cost from china to Boston was about the same as to Boston to the suburbs of Boston. Based on this, i believe that the proper structure will be as follows:

First Stage: Too expensive to ship by truck over large distances. (Greater than 50 miles)

Second Stage: Too expensive to ship by truck any distance or by rail over large distance. (Greater than 50 miles)

Third Stage: Too expensive to ship by truck or rail.

This of course applies mainly to bulkier goods. I believe people will always be able to pay the freight on very high value items of low mass. (i.e. jewerly, illegal drugs, etc.)

"New type of cloud found"
"An unusual type of storm cloud could become the first new variety of cloud to be officially identified in more than half a century."


"There would probably need to be quite a lot of heat around to produce the energy needed to generate such dramatic cloud formations. They are quite dark structures so there must be a lot of water vapour condensing in the cloud."

Nothing to see here, move along.

They look really cool, though. The last photo is especially dramatic.

I've seen these in my area. Just rolling, wave-like clouds that don't really move fast.

Sounds like lenticular clouds maybe.

In any case, what's going on is not a "new kind of cloud found", it's a refinement of the naming scheme for clouds.

I also saw this once in my life. No doubt when you see it you know its a different type of cloud pictures don't do it justice.

In my case it look more like a inverted raging sea similar to Leanans picture.

You feel like your in a painting.

I remember it vividly.

PostPeak Asphaltistan's dust clouds will trump these airborne clouds. Recall the 1930's Dust Bowl photos when there was more flying topsoil than what was on the ground. :(

Leave it to you, toto, to find the silver lining.

This kind of cloud is perfect for our "new" somber world -- the mood of our time expressed perfectly by nature herself.

"We don't know who struck first, us or them. But we do know it was us that scorched the sky."
-- Morpheus, "The Matrix"

Jay Farrar pens peak oil anthem, “When the Wheels Don't Move”

A gifted narrator, Farrar[’s] lyrical ruminations have always had a strong resonance with the lives of everyday Americans, and “When the Wheels Don't Move” marks a new evocative high point. On the track Farrar asks, “Who makes the decision/To feed the tanks and not the mouths/When the wheels don't move?”

“That one was inspired by that period last year when gas prices skyrocketed,” Farrar explains. “I started thinking of it in terms of bands just starting out-how they could even afford to tour anymore.

“They're maybe making $100 a gig, and it costs more than that to get from one town to the next.”


Listen to a generous sample HERE and follow the lyrics.

When the Wheels Don’t Move

Who will work the assembly line
Who will pull the freight on time
Who will work the all night haul
Who will explain it all
When the wheels don’t move

Bigger chariots didn’t save Rome
Easy money didn’t stay at home
They said the iron horse would always roam
Who will tell the children
When the wheels don’t move

Man’s power over nature
Hubris and greed let the fossil fuels burn
No way to keep the wings in flight
When the turbine engines don’t move

Going green a casino catch phrase
Ethanol is made of smoke and mirrors
Who makes the decision
To feed the tanks and not the mouths
When the wheels don’t move . . .

[end sample]

[The red planet as salvation
Divine hope turns to depredation
Who’ll be left to make that station
Devoid of god and nation (we trust)
When the wheels don’t move]

Son Volt is touring with the Cowboy Junkies this summer.

Anybody have any idea what increased Chinese net imports of oil (and nat gas for that matter) will have on international money flows? You think much of those petroyuan will be recycled into dollars, or back into yuan denominated assets?

Chinese dollars are 'flowing' out of Treasuries and into crude. The Chinese are on a commodities accumulation binge, trying to get worth for dollar value ... while the dollar still has value. Of course, China's getting rid of dollars is a reason for the dollar's loss of value.

Self- fulfilling Feedback loop!

The yuan doesn't trade ... unless you are an inhabitant of glorious Belarus, Argentina or Hong Kong.

When a Chinese 'businessman' obtains dollars ... as when he sells some cheap plastic nonsense to Walmart ... the dollars he receives are turned in to a Chinese bank for yuan. Mr. Businessman has no choice. Only the government or its proxies can spend or hold dollars. I believe the official exchange rate (peg) is six point something, something yuan per dollar. Using that dollar as reserve the Chinese banks lend into existence an unknown amount of Yuan - fractional reserve lending. Yes, the Yuan is another worthless fiat currency, not a 'petro currency'. Nobody knows what the leverage rate is ... but who cares!

The Chinese economy is growing, isn't it? Happy days are here again! A (scrawny) chicken in every pot!

BTW, the article about the 'innovation shortage' is appropriate: the greatest innovation of the past fifteen or so years has been the one to shift US jobs overseas to China. This requires no patents, no technology and can be subsidized by the customers of the goods themselves, sending the dollars to China so that the government can use the credit to build 'free factories' for the replacement workers and give them 'free utilities' and allow 'free dumping of factory waste' in rivers and streams and 'free emission of various pollution and greenhouse gasses'. This innovation has certainly been more profitable for the US than any other made during that period. The one - the sending of US jobs to China - can be considered a precurser to the other - a decline in he rate of technical innovation. Invention is less profitable to the American company than having its work done not by invention but by low- tech Chinese sweatshop labor.

From this standpoint the 'Asian future' for the rest of the world looks a lot like the 19th century, China has arrived there first.

Hello Leanan,

Thxs for the DB toplink: "Current Market Strategy? Invest in Resource-Rich Countries"

Problem is this can only go so far before some people get really pissed. Imagine if the US thought like Thomas Jefferson, then bought our oldest ally Morocco for geo-strategic monopoly control of P. 'Urine' a dire Liebig Minimum situation if your area is now excluded from P.

China & Russia would let their Ultimate Chrome Penises [UCPee?] go intercontinental towards Morocco's OCP. Many think that this will be our ultimate phos-fate. :(

Have you hugged your bag of NPKS today?

Bob Shaw in Phx,Az Are Humans Smarter than Yeast?

Hopefully the world will avert this post[P]eak scenario by adopting full-on O-NPK recycling, SpiderWebRiding, Earthmarines, Asimov's Foundations, Porridge Principle of Metered Decline, plus many other strategies for Optimal Overshoot Decline, as discussed in my prior postings.

I would love to see the definition of ICBM change to a person's excited, unexpected discovery of feces: 'I Cee a Bowel Movement'. Recall Macfarlane PDF and Jenkin's Humanure Handbook.

“The green revolution has brought us only downfall,” says Jarnail Singh, a retired schoolteacher in Jajjal village. “It ruined our soil, our environment, our water table. Used to be we had fairs in villages where people would come together and have fun. Now we gather in medical centers. The government has sacrificed the people of Punjab for grain.”

From National Geographic

The P issue is slowly coming out in other media, although many people will dismiss the information as left-wing eco-propaganda because it was published in Salon. Many people don't even know Scientific American exists, or care...it involves thinking and doesn't have the latest poop on celebs. Just the poop on poop.

Nice reference to Asimov's article, which I read many moons ago.



North Dakota regulators expect wind power might increase electric bills 18-30%

ND regulators seek rule change on wind power costs, AP News, Yahoo News, June 3

The question then is, what would the LACK of windpower raise electricity to?

These folks at the Falkirk mine and Coal Creek Station and the other 4-5 lignite-burning power plants within a 20-mile radius of Coal Creek Station are probably cheering this issue on...they don't want any pieces of their profit pie ever taken away.



Please note the words from this site above which state that the largest lignite-fired coal generating station in the U.S. exports its power to Minnesota and has been doing so since the late 1970s. Gee, have the people pf ND been pitching a hissy all this time about subsidizing the export of coal-fired electricity out of state? No. The installation costs of those transmission lines have been amortized away for at least a decade.

That being said, the consumers of the juice need to pony up the fundage to construct the electric lines. I don't want to hear about NIMBY up there...I lived there and drove through the Minn-Dak-Mon area, and the population density is lower than most people could imagine in most of the land areas (outside the cities). Pay the farmers an annual lease for the transmission tower siting.

Besides, NoDak is doing so well financially (full employment) that they can pay a couple of pennies more for their juice, as long as the consumers out of state pay the majority of the increased rates in order to fund the transmission infrastructure. Albuquerque gets most of its juice from Palo Verde in Phoenix, and that is a good stretch of transmission lines to make that happen, comparable to the run from Coal Creek Station to central Minnesota.

Saturn to turn into a "dealer only" operation. Do you suppose that could actually into a way to get fuel efficient cars into the US market? We could use a miracle or two.